The cumulative evidence of research on early childhood care and children's development consistently finds that higher-quality care is predictive of a range of positive developmental outcomes for children, including improved language development, cognitive functioning, social competence, and emotional adjustment. This has led many states to attempt to improve the availability of high quality early childhood care through a tiered quality rating system. Under this system, states define thresholds or cut-off points across various dimensions of quality, and provide different amounts of reimbursement to providers depending on their compliance with the quality standards. The literature provides little guidance to state policymakers as to where the thresholds should be set, as few studies have identified the specific cut off points or thresholds that can distinguish among different levels of child outcomes. Thus, it is unknown whether the cut off points established by state policymakers actually discriminate among better and worse child outcomes. This can raise fairness questions if providers receive different amounts of reimbursement for implementing different levels of quality, yet there are no differences in child outcomes. The purpose of this study is to provide some guidance to state policymakers about potentially optimal cut off points by using advanced statistical methods to identify the thresholds that must be exceeded before significant differences in child outcomes can be observed between providers that meet the established quality standards and providers that do not. It will also identify the points at which there are diminishing returns in quality investments. We will use data from the Cost, Quality, and Outcomes Study and the Early Childhood Longitudinal Study Birth Cohort through 2 years old, Restricted Use to examine threshold effects. We will examine various quality indicators, such as staff education and training, childstaff ratios, group size (i.e., the number of children in the class), ECERS/ITERS, and parental involvement. Children's social, cognitive, and physical health outcomes will serve as the outcome measures. The results of the study will give policymakers a better indication of which specific cut off points discriminate among different levels of child outcomes. This will help inform sensible approaches to differential reimbursement strategies.